Joe Hockey's tax disclosure wind-back is a 'reform' nobody asked for, The Guardian, 21 August
This week’s Parliamentary sittings began with the tabling of a Senate report into how some big companies are dodging their tax bills. The report found that billions of dollars are draining offshore through holes in the tax system. It called for better tax transparency to hold companies accountable for shirking their fair share.
Asked on ABC radio what the government was doing about the problem, Treasurer Joe Hockey pointed out that a law requiring the tax office to disclose the tax paid by large firms was about to come into effect. What he didn’t say was that he was about to gut that law.
The Parliamentary week has ended with the Abbott Government introducing a bill to help some of Australia’s biggest companies keep their tax dealings secret. This means we’ll never know just how much dodging they may be getting away with. Far from backing better transparency, the Abbott Government is actually working to shield huge firms from any public scrutiny.
The Coalition’s bill is designed to eviscerate transparency laws Labor put in place in 2013. Labor’s laws require the Australian Tax Office to publish information about the income and tax paid by companies earning more than $100 million.
$100 million isn’t loose change. These are some of Australia’s biggest firms. In fact, there are only around 2,000 companies doing business here that currently earn enough to be included in this reporting.
The government now wants to carve out over 800 of these companies so that they can continue keeping their tax affairs secret. They argue that private firms shouldn’t be held to the same standard of accountability as publicly-listed companies.
It is telling that this is the first major piece of tax legislation the government has introduced this year. While he’s been talking a big game about the government’s plans since December last year, Mr Hockey’s bill to tackle multinational tax avoidance is still nowhere to be seen. When it comes to making big firms pay their fair share, Mr Hockey is all mouth and no trousers.
I recently submitted a Freedom of Information request to find out just how many people had written to the Treasurer and his offsiders, calling for these transparency laws to be changed. See if you can guess how many pensioners and parents, community groups and small businesses have been pushing for less scrutiny on big firms. You got it – not one.
In fact, these ministers reported no-one had written to them at all about these laws. So the question has to be asked: is this a serious and necessary change? Or the sort of idea that only comes up after the second glass of wine when these ministers gather with their mates down at the Melbourne Club?
Tax transparency matters because without it, we have no way of knowing if big companies are paying their fair share. There are plenty that do, and their contribution deserves acknowledgement.
More importantly though, it is clear that some firms don’t. When companies are paying tax at a fraction of the standard rate, Australians should ask why. At a time when the government is talking about raising the GST to 15 per cent – a decision that would hit low-income Australians hardest – it is right that we should look closely at whether all taxpayers are making a fair contribution.
We won’t be able to do that if the government gets its way on replacing transparency with secrecy. The consequence is that some companies will continue to get away with ducking their taxes. Every dollar that gets sent offshore or minimised with a handy loophole is a dollar that can’t be spent on things that matter. Things like hospitals, schools and a liveable pension, which have all been under sustained attack from the government’s budget cuts.
If the government had its priorities right, it’d be delivering policies to stop companies shirking their tax. We’ve had our own $7.2 billion package of proposals to tackle tax avoidance on the table since March this year, but the Treasurer doesn’t want a bar of it.
In a week when we’ve seen substantial evidence about tax avoidance in Australia, it must seem like some kind of joke for the government to actually be pushing for more corporate secrecy. But I’m not laughing. Instead, I’m angry that their top priority on tax is helping big companies hide from public scrutiny. You should be too.